Toll Brothers, Inc. (TOL), one of the leading luxury homebuilders in the U.S., is all set to unveil its third quarter 2012 results on August 22, 2012, after the market closes. The Zacks Consensus Estimate is calling for 18 cents on revenues of $505 million.

Second Quarter 2012 Recap

Toll Brothers reported earnings of 9 cents per diluted share in the second quarter of fiscal 2012, versus a loss of 9 cents in the previous year. The year-over-year surge in earnings was driven by strong sales and cost saving strategies.

Earnings per share surpassed the Zacks Consensus Estimate of 4 cents.

The company reported revenue of $373.7 million in the second quarter of fiscal 2012, up 17% from the comparable prior-year quarter, driven by a rise in demand and low competition for luxury products. The revenue was below the Zacks Consensus Estimate of $379 million.

Agreement of Estimate Revisions

Over the last 30 days, two of 13 estimates for the fiscal third quarter moved higher., while 2 of 14 estimates advanced for fiscal 2012.

Our Recommendation

We currently have an Outperform recommendation on Toll Brothers. The stock carries a Zacks #2 Rank (short-term ‘Buy’ rating).

We appreciate the company’s order growth, stable margins and improved pricing. We believe that the company has benefited from its focus on the premium segment, which is witnessing growing demand and limited competition.